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North-South house price divide deepens, warns Hometrack

North-South house price divide deepens, warns Hometrack

UK house prices have increased by an average of £11,500 over the last 12 months to May - but seven cities in southern England have significantly outperformed this, widening the north-south house price gap even further. 

Hometrack says the average UK house now costs £189,400 with London more than double this figure at £425,700.

But of 20 cities analysed by the Hometrack consultancy Oxford has recorded the highest gains in the last 12 months of £41,700 - that’s nearly quadruple the UK average of £11,500.

Then came London (£38,900), Cambridge (£23,900), Bristol (£22,400), Southampton (£15,300), Bournemouth (£15,300) and Portsmouth (£15,000). 

All 20 cities have recorded gains in the last 12 months but three Northern cities fared the worst adding less than half the UK average to house prices. 

Liverpool (£4,200), Newcastle (£4,700) and Sheffield (£5,300) are still 14 per cent, 8.5 per cent and 3.8 per cent respectively below their 2007 peak.

Hometrack says they are part of a group of nine cities in the North of England, Scotland and North Ireland that are recovering at a much slower pace due to weaker demand from house buyers.

“An increasing proportion of households are feeling the benefits of the improving economy, which means that house price growth is set to continue in the coming months. The greatest risk is an earlier than expected increase in interest rates which would knock market sentiment” says Hometrack director Richard Donnell.

But he warns that “the strong demand-side recovery seen in southern England has yet to spread to other cities revealing the diverse nature of the housing market. All cities are making gains at different rates of growth, but the cities with the biggest increases all have something in common – strong local economies.”

 


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